La Liga leaders Real have decided to listen to offers for the 28-year-old after he was caught up in yet more controversy during the first leg of their Copa Del Rey quarter-final with fierce rivals Barcelona 11 days ago.
Pepe was accused of stamping on Lionel Messi’s hand as the Argentinian lay on the ground.
Although he has since been cleared of any wrongdoing by the Spanish Football Federation, that has not stopped a furore over the incident. Hotline understands that Real president Florentino Perez is growing increasingly tired of what he sees as a lengthening list of misdemeanours by the player.
Now Chelsea will monitor the situation and, if it proves to have broken down beyond repair, will see if a deal can be struck after Euro 2012.
The Real hierarchy believe that Pepe is damaging the image of the club, while the player himself is said to be furious at what he perceives to be a campaign in the Spanish press to paint him in a bad light.
Real boss Jose Mourinho is aware of the club’s position and knows that, unless things change between now and the end of the season, Pepe will be sold.
Villas-Boas is a big fan of the Brazil-born Portugal defender and believes he could be a key signing for Chelsea.
Pepe’s agent, Jorge Mendes, is aware of Villas-Boas’ interest in his client, although there has been no formal enquiry from Stamford Bridge.
Real paid Porto £25million for Pepe in 2007 and last summer signed a new deal to keep him in Madrid until 2016.
His annual salary at Real is around £3m, which Chelsea would be able to match.